Greene King issues Brexit warning despite growth

By Oli Gross contact

- Last updated on GMT

Greene King issues Brexit warning despite growth
Greene King has warned licensees that consumer confidence may be affected by Brexit, after reporting strong financial results in a ‘transformational year’ for the pubco.

Like-for-like sales were up 1.5% for the year to May 1, ahead of a market average of 1.3%, while its Pub Partners net income was up 2.7%.

Following the acquisition of Spirit Pub Company, Greene King has hit the milestone of £2bn revenue, but chief executive Rooney Anand has warned consumer confidence will be affected by Brexit in the short-term.

He said: “It has been a transformational year for Greene King. We completed the acquisition of Spirit Pub Company and reached the milestone of £2bn revenue. We have delivered growth across each of the three divisions, outperforming the market in a challenging environment, while making significant progress in combining the best of both businesses to build Britain’s best pub company.

“I am pleased to report a strong start to the new financial year, although it is likely that consumer confidence will be affected by Brexit in the near-term. However, Greene King has a strong track record of performing well in challenging conditions, we are a resilient business with a talented team and a strong balance sheet, and we will benefit from the opportunities created by the Spirit acquisition. We are well placed to continue delivering value to our shareholders.”

Full financial results:

Market outperformance

  • Pub Company like-for-like (LFL) sales +1.5%; ahead of the market +1.3%4
  • Pub Partners LFL net income +2.7%
  • Brewing & Brands own-brewed volume (OBV) +2.9%; ale market share up 40 basis points to 10.5%

Financial strength

  • Operating cash flow +24.1%; net debt/EBITDA improved to 3.9x5
  • Group return on capital employed (ROCE) +10 basis points to 9.4%
  • Dividend per share up 7.7%, continuing our progressive dividend track record

Strategic & operational progress

  • Five strategic priorities outlined to drive future underlying growth
  • Record customer satisfaction scores in Greene King Pub Company; net promoter score (NPS) +7.9%pts
  • Greene King named Best Managed Pub Operator at the 2016 Publican Awards

Acquired Spirit Pub Company; integration & synergies ahead of plan

  • £16.7m of cost synergies delivered versus year one target of £12m
  • Tenanted and leased integrated ahead of schedule; integration of the managed business well under way
  • Five retail growth brands identified & optimisation programme commenced to deliver long-term growth

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